Global Regulatory Update for October 2018

The Acta Group’s (Acta®) Senior Regulatory Consultant Michael S. Wenk, M.S. presented in mid-September an engaging, content-rich webinar on the emerging chemical regulatory initiatives underway in the Middle East, with a focus on Bahrain, Egypt, Israel, Oman, Pakistan, and Saudi Arabia, and the Cooperation Council for the Arab States of the Gulf. If you missed the live webinar, you can view the recording online. Whether you are in the planning stages of entering the Middle East commercially or have operated in the region for many years, we believe the information shared during the webinar will be useful to your business operations given the evolving nature of chemical initiatives in that part of the world.

Technical Regulation On Degradable Plastics Products Released: The Kingdom of Bahrain’s Standards and Metrology Directorate has issued its “Technical Regulation on Degradable Plastics Products.” The Ministry of Industry, Commerce and Tourism, along with the Supreme Council for Environment, have collaborated to establish a National Technical Regulation (TR) to phase out the import, sale, or distribution of non-degradable plastic products. The proposed TR sets out the requirements with respect to specifications, licenses, labeling, and other requirements for such products. Specifically, the TR focuses on ethylene and polypropylene polymers for the conveyance or packing of goods not designed for prolonged use. Interestingly, this also includes degradable, biodegradable, and oxo-degradable single-use plastic products. The final date for comments is November 3, 2018.

BRAZIL

Draft Regulation Of “Brazilian RoHS” Under Development: A working group comprised of representatives of federal government bodies, civil society entities, and industry, established by the Comitê Nacional Sobre Segurança Química (National Chemicals Safety Commission; CONASQ), has presented an internal draft of the regulation governing the use of hazardous substances used in electrical and electronic equipment (EEE). The draft is based on Directive 2011/65/EU, the “Restrictions on the use of Certain Hazardous Substances,” and as such is colloquially known as “Brazilian RoHS,” the work product of CONASQ’s “Brazilian RoHS Working Group.”

The draft sets forth proposed restrictions on the use of lead, cadmium, mercury, hexavalent chromium, binefil polybromate (PBB), diphenyl polybromate ether (PBDE), and four types of phthalates. No date is set at present for either publication of the draft or for a vote on the legislation.

Industrial Chemicals Regulation Development Continues: The draft Brazilian Regulamento Químico Industrial (Industrial Chemicals Regulation; Regulamento), the bill expected to serve as a national chemical substance inventory and notification process in the country, continues to wind its way through the legislative process. The final text of the Regulamento was agreed upon during the most recent meeting of CONASQ on September 4 and 5, 2018.

After the meeting, the Ministry of Environment announced it intends to send the final text to the Ministro-Chefe da Casa Civil da Presidência da República’s (Minister Chief of Staff of the Presidency of the Republic; Ministro-Chefe) office by the end of this year. The Ministro-Chefe is the second-highest ranking member of the Executive Office of Brazil, and a senior aide to the President.

The Regulamento is presently undergoing a judicial review of the text. Once completed, it is expected to receive signatures from the relevant Ministries (Environment, Health, Labor and Industry) before being sent to the Ministro-Chefe. The Ministro-Chefe will analyze the text again and, once it is validated, will send it to the Congress. Then the legislative voting process will start. We expect the text will be sent to the Congress early in 2019, when the new government will be in place.

IBAMA Releases Draft Revision To Agrochemicals Law: The Comitê Técnico de Assessoramento para Agrotóxicos (Technical Advisory Committee for Agrichemicals, CTA), a group comprised of the Ministries of Health, Agriculture, Livestock and Supply, and the Environment have proposed a revision to the Agrochemicals Law (Law No. 7.802/1989). Issued on behalf of the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis (Brazilian Institute of Environment and Renewable Natural Resources, IBAMA), the CTA has noted an imbalance between the sheer number of registration requirements and the ability of the responsible agencies to evaluate submissions in a timely manner. Key among the proposed revisions is the setting of criteria for the technical evaluation of “priority products,” where having a more efficient review process would not harm the environment or public health.

CANADA

Audit Reviews Canada’s Enforcement Of CEPA Regulations To Control Toxic Substances: On October 2, 2018, the Commissioner of the Environment and Sustainable Development tabled its audit of whether Environment and Climate Change Canada (ECCC) enforced regulations under the Canadian Environmental Protection Act, 1999 (CEPA) to control the risks of toxic substances. The audit included an examination of six substances -- lead, mercury, polychlorinated biphenyls, dioxins and furans, dichloromethane, and polybrominated diphenyl ethers -- to determine whether ECCC and Health Canada (HC) had evaluated their progress in meeting objectives for reducing risks to the environment and human health. The audit also examined whether ECCC and HC communicated the risks of toxic substances to the public. Overall, the audit found that ECCC and HC still had significant work to do in selected areas to control effectively the risks of toxic substances and to inform Canadians about those risks. According to the audit, ECCC has improvements to make in some aspects of its approach to enforcing toxic substance regulations under CEPA. ECCC conducted inspections and other enforcement activities to ensure that businesses complied with regulations on toxic substances, but in most cases, the audit states, it did not base its enforcement priorities on risks to human health and the environment. In addition, the audit notes that ECCC has not fully addressed selected recommendations from previous audits. ECCC lacked timely access to information about which businesses were regulated, had not yet set time frames to follow up on violations, and had not addressed all of the enforceability issues it had identified in regulations.

Canada Proposes To Amend Regulations Prohibiting Certain Toxic Substances: Canada published a notice in the October 13, 2018, Canada Gazette announcing its intent to amend the Prohibition of Certain Toxic Substances Regulations, 2012. The Department of the Environment and the Department of Health are initiating the development of amendments to the Regulations to restrict further the manufacture, use, sale, offer for sale, and import of two flame retardants (hexabromocyclododecane (HBCD) and PBDEs) and three oil and water repellents (perfluorooctane sulfonate (PFOS) and its salts and precursors, perfluorooctanoic acid (PFOA) and its salts and precursors, and long-chain perfluorocarboxylic acids and their salts and precursors (LC-PFCAs)). The notice states that if the final screening assessment reports for two additional flame retardants, dechlorane plus (DP) and decabromodiphenyl ethane (DBDPE), conclude that they are toxic under CEPA Section 64, notice is also given that the Departments will initiate the development of amendments to the Regulations to prohibit their manufacture, use, sale, offer for sale, and import. Comments on the notice of intent to amend the Prohibition of Certain Toxic Substances Regulations, 2012 are due November 12, 2018. According to the notice, a consultation document outlining the proposed regulatory approach to amending the Regulations will be published for public comment in fall 2018. Interested parties will also have an opportunity to make written comments on proposed amendments to the Prohibition of Certain Toxic Substances Regulations, 2012 during the mandatory consultation period that will follow their publication in the Canada Gazette, Part I, in winter 2019-2020.

NGOs Urge Introduction Of CEPA Amendments In Fall 2018 Session Of Congress: A number of non-governmental organizations (NGO) sent the Minister of Environment and Climate Change and Minister of Health draft legislation to amend CEPA to protect better human health and the environment from toxic substances. As reported in Acta’s August 2, 2018, Global Regulatory Update, on June 29, 2018, the Ministers submitted the Follow-Up Report to the House of Commons Standing Committee on Environment and Sustainable Development on the Canadian Environmental Protection Act, 1999. The Follow-Up Report describes the many areas where the government is committed to taking further action in the near-term. To address recommendations that require legislative reform, the ECCC stated that it would conduct a thorough review and consult widely with Canadians as it works toward updating the Chemicals Management Plan (CMP) and overhauling CEPA through amendments in a future Parliament. The NGOs state that CEPA has not been amended in 20 years and urge that the legislation be introduced in the fall 2018 session of Parliament. According to the October 16, 2018, Canadian Environmental Law Association (CELA) press release, the amendments presented to the Ministers address five areas of concern: (1) control over endocrine disrupting substances; (2) establishment of enforceable national ambient air quality standards; (3) protection of vulnerable populations from toxic substances; (4) substitution of safer alternatives to toxic substances; and (5) civil enforcement of CEPA by the public in the courts.

Canada Takes Measures To Ban Asbestos And Asbestos-Containing Products: Canada issued an October 18, 2018, press release announcing the Prohibition of Asbestos and Products Containing Asbestos Regulations “final step to prohibit asbestos and asbestos-containing products in Canada.” The Regulations prohibit the import, sale, and use of asbestos, as well as the manufacture, import, sale, and use of asbestos-containing products, with a limited number of exclusions. In addition, exports of asbestos and asbestos-containing products are now prohibited, with a limited number of exceptions, and the existing Export of Substances on the Export Control List Regulations and CEPA Schedule 3 were amended to reflect that. The new Regulations and related amendments will come into force on December 30, 2018.

EUROPEAN UNION (EU)

ECHA Re-elects Management Board Chair And Confirms Executive Director: On September 21, 2018, the European Chemicals Agency (ECHA) issued a press release entitled “Management Board re-elects chair.” In its press release, ECHA states that its Management Board has re-elected Sharon McGuinness as its Chair, and confirmed Bjorn Hansen in his position as Executive Director. McGuinness, Irish Representative to the Management Board and CEO of the Irish Health and Safety Authority, stated:

I feel [honored] to continue as the chair of ECHA’s Management Board. I look forward to working with the Agency to implement its Strategic Plan 2019-2023 and build on the Agency’s successes to date whilst adapting to the challenges and opportunities that face us as we address the REACH Review and new tasks assigned.

The confirmation of Hansen as ECHA’s Executive Director followed an assessment over a nine-month probationary period. Hansen started in his position at the beginning of 2018, with an initial mandate of five years.

EEB Issues Letter Regarding Authorizations To REACH Committee: On September 24, 2018, Tatiana Santos Otero, Senior Policy Officer at the European Environmental Bureau (EEB), issued a letter to the members of the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) Committee. In the letter, EEB focuses on authorization applications under REACH for chromium trioxide and bis(2-ethylhexhyl) phthalate (DEHP).

Regarding Gerhardi Kunststofftechnik GmbH’s (Gerhardi) authorization application for a use of chromium trioxide, EEB states it “is very concerned with this [authorization] being granted while alternatives are clearly available on the market.” EEB states that, in its view, the application for authorization submitted by Gerhardi does not demonstrate that alternatives are unavailable. Moreover, EEB states “ECHA’s opinion is outdated and disregards the fact that technology has rapidly developed … Alternatives are already available and have been economically and technically feasible for at least the last two years, according to the manifesto of the Alliance of PVD Providers submitted to the REACH committee members last week.”

EEB states that approval of this authorization application would undermine the credibility of the authorization process, turn authorizations into “permits to pollute,” and create an economic disadvantage for companies that have invested in safer alternatives. EEB further states “[h]azardous and obsolete substances should have no future in the EU. The EU needs to reward the companies making substitution happen, instead of rewarding the laggards by granting them [authorizations] to continue the use of [Substances of Very High Concern (SVHC)].”

There are suitable alternative substances and technologies for the uses applied for; and

The socio-economic benefits of the continued use have not been demonstrated to outweigh the risks to human health or the environment.

EEB highlights that DEHP was on the first batch of chemicals placed on the Authorization List, and that although the “sunset date” was January 1, 2015, companies are still allowed to “keep placing this SVHC on the EU market pending the final [authorization] decision.” EEB refers specifically to Grupa Azoty ZAK S.A., which has shifted from DEHP to “non-orto-phthalate plasticizers alternatives, therefore obviously proving the availability of alternatives.”

EEB states that it believes authorities should now take into account the availability of safer alternatives, and the fact that DEHP has been identified as an endocrine disrupting chemical on the Candidate List. Otherwise, EEB suggests, the European Commission’s (EC) decision would be based on highly outdated scientific and economic information communicated by the applicants and ECHA’s committees at the time of application, in 2013.

EEB emphasizes the change in circumstances for both authorization cases, in terms of risks to human health or the environment and possible substitutes. In conclusion to the letter, EEB asks REACH Committee members to:

Reject the authorization of the Gerhardi application as the applicant has not demonstrated that alternatives are not available; and

Reject the authorization for the use of DEHP in PVC consumer articles based on REACH Article 60, paragraphs 2 and 4.

ECHA Will Begin Sending Dossier Evaluations To All Non-Compliant Registrants: ECHA announced on September 26, 2018, that as of January 1, 2019, it will begin checking the compliance of all relevant dossiers for a given substance and will address its decisions to all registrants with non-compliant dossiers. ECHA will also begin addressing its decisions on testing proposals to all those registrants intending to rely on the proposed tests to fulfill their information requirement. According to ECHA, the change is intended to support the collaboration and communication between registrants regarding their joint submissions after the Substance Information Exchange Forums (SIEF) ceased to exist as of June 1, 2018. In addition, ECHA states, in line with the expectation that registrants are keeping their dossiers up to date, ECHA will no longer consider changes related to the tonnage band, uses, or the intermediate status of a registration after a draft decision is notified to the concerned registrants. ECHA recommends that registrants review and update their registration dossiers before 2019, paying special attention to:

Changes in production or import volumes (increase or decrease);

New or obsolete uses;

New or changed measures to ensure the safe use of the substance;

The transported or on-site isolated intermediate status;

New data on the intrinsic properties of the substance; and

The justification for relying on waivers for the required information, or on adaptations such as category or read-across approaches.

REACH Committee Approves EDC Authorization Applications: During the REACH Committee meeting on September 28, 2018, Member States unanimously approved three authorization applications for uses of 1,2-dichloroethane (EDC), which is listed in the REACH Annex XIV Authorization List. EDC is included in REACH Annex XIV under Article 57(a) due to its carcinogenic properties, and the substance had a sunset date of November 22, 2017.

The following companies’ applications were approved by the REACH Committee:

Akzo Nobel Chemicals SpA’s application for use of EDC as a recyclable solvent in the production of a polyacrylate surfactant. The recommended review period is due to expire on November 22, 2026.

Microbeads AS’ application for use of EDC as a swelling agent during the sulfonation reaction of crosslinked polystyrene beads in the manufacture of ion exchange resins for purification of radioactive waste.

Orgapharm’s application for use of EDC as a process solvent in the manufacture of active pharmaceutical ingredients. The recommended review date is November 22, 2024.

ECHA Updates Q&As On Brexit And REACH: ECHA announced on October 11, 2018, that it updated the questions and answers (Q&As) providing advice to companies on the United Kingdom’s (UK) withdrawal from the EU and REACH. The updates cover topics related to the authorization and registration of substances and mixtures, as well as general advice to current non-EU companies. The updates also provide advice on transferring assets between a company’s affiliates. ECHA states that it does not plan to expand its Q&As significantly ahead of the date of the UK’s withdrawal on March 30, 2019. ECHA recommends that companies check for updates in the coming months, however. ECHA prepared the Q&As on the basis that the UK’s withdrawal will take effect on March 30, 2019. If the EU and the UK conclude a withdrawal agreement and therein agree on a transition period, ECHA states that it will amend the Q&As accordingly. ECHA will publish new Q&As related to Brexit and the Biocidal Products Regulation (BPR) “soon.” More information is available in ECHA’s press release, “ECHA updates information for companies on UK withdrawal from EU.”

Draft CoRAP For 2019-2021 Proposes 96 Substances For Evaluation: On October 10, 2018, ECHA published the draft Community Rolling Action Plan (CoRAP) for 2019-2021. According to the draft CoRAP, 28 substances are planned to be evaluated in 2019, 43 are listed for evaluation in 2020, and 25 are listed for 2021. ECHA recommends that registrants of a listed substance begin coordinating their actions and contact the evaluating Member State authority. Downstream users of a listed substance should review the information they have available and share it with the registrants. ECHA states that it is important that the use and exposure scenarios, as well as the exposure estimations, are up to date and clearly documented within the registrants’ chemical safety reports. For the 28 substances planned to be evaluated in 2019, the relevant dossier updates should be made before March 2019. ECHA will adopt the final CoRAP for 2019-2021 in March 2019.

EC Announces New Restrictions Intended To Protect Europeans From Hazardous Chemicals In Clothing And Textiles: The EC announced on October 10, 2018, that it adopted new restrictions for the use of 33 substances known to cause cancer and reproductive health problems for their use in clothing, footwear, and other textile articles. The new rules have been adopted by amending REACH -- “the most advanced and comprehensive chemical legislation in the world.” The new rules set maximum concentration limits for the use of carcinogenic, mutagenic, or toxic for reproduction (CMR) substances in clothing and textiles and prohibit products exceeding these limits from being placed on the EU market, regardless of their origin of production. The EC notes that it prepared the restrictions on the basis of scientific and technical recommendations by ECHA and following broad consultations with stakeholders. The restrictions will apply 24 months after publication of the regulation in the Official Journal of the European Union. The EC states that it will also issue an explanatory guide on the restriction, which will be available here after the restrictions are published in the Official Journal.

EP Committee And Council Of The EU Reach Agreement On Amendment To Carcinogens And Mutagens Directive: On October 11, 2018, the European Parliament (EP) Committee on Employment and Social Affairs announced that it reached an agreement with the Council of the EU on an amendment to the Carcinogens and Mutagens Directive. The amendment is intended to protect workers better from exposure to carcinogenic and mutagenic substances, and includes exposure limit values and skin notations for eight additional substances. The Council of the EU’s Permanent Representatives Committee approved the agreement on October 24, 2018. The Council’s October 24, 2018, press release states that the main elements of the amendment are:

Diesel engine exhaust emissions: An exposure limit value of 0.05 milligrams per cubic meter (mg/m3) measured in elemental carbon is established for all diesel exhaust fumes. The limit value will enter into force two years after the end of the transposition period, and five years after the end of the transposition period for the sectors of underground mining and tunnel construction;

Mineral oils that have been used before in internal combustion engines: The amendment establishes a skin notation for used engine oils. Exposure to used engine oils can be reduced through best practices, such as the use of gloves and other personal protection equipment;

Trichloroethylene: This substance is commonly used as an industrial solvent and in the manufacture of fluorocarbon refrigerants. Under the amendment, workers’ exposure must be limited to 54.7 mg/m3 for the long-term and 164.1 mg/m3 in the short-term. In addition, a skin notation is established;

Epichlorohydrine: Exposure to this substance, which is used in the production of plastics and epoxy glues and resins, will be limited to 1.9 mg/m3. The amendment also establishes a skin notation;

Ethylene dichloride: The amendment establishes an exposure limit value of 8.2 mg/m3, as well as a skin notation. Ethylene dichloride is commonly used to produce vinyl chloride, which in turn is converted into PVC; and

Polycyclic aromatic hydrocarbons mixtures, particularly those containing benzo[a]pyrene: Exposure to such mixtures can occur during work involving burning processes, such as from combustion engine exhaust. The directive establishes a skin notation.

The agreement will now be sent to the EP for adoption in the plenary.

ECHA Extends Scope Of PACT: ECHA has expanded the scope of the Public Activities Coordination Tool (PACT) to cover substances under dossier and substance evaluation, as well as substances in the registry of intentions for harmonized classification and labeling, SVHC identification, or restriction. ECHA states that PACT “offers companies an overview of information on substances that are on an authority’s radar for potential regulatory risk management.” This advance notice “enables companies to consider their business strategy and gives all stakeholders more time to prepare their contributions to the public consultations that are ran during the formal risk management processes.” PACT also includes three new standalone lists for substances undergoing regulatory management option analysis (RMOA); persistence, bioaccumulation, and toxicity (PBT)/very persistent and very bioaccumulative (vPvB) assessment; and endocrine disruption assessment. More information is available in ECHA’s October 15, 2018, press release, “ECHA increases visibility of authority activities.”

Chemical Industry And Trade Unions Call On EC To Update EU Rules On Reprotoxic Substances In The Workplace: The European Chemical Industry Council (Cefic) issued an October 16, 2018, press release, “Chemical industry and workers call on the European Commission to update EU rules on reprotoxic substances at the workplace,” announcing that the chemical industry and trade unions have agreed on a future framework to protect EU workers further from the risks associated with exposure to substances toxic to reproduction in the workplace. In a joint declaration, the European Trade Union Confederation (ETUC), industriAll European Trade Union, the European Chemical Employers Group (ECEG), and Cefic call on the EC to strengthen the current system of protection of workers’ reproductive health. The joint declaration provides the group’s input into the ongoing debate on revising legal requirements for exposure to reprotoxic substances under the EU Chemical Agents Directive, which applies to any hazardous chemical present at work, including reprotoxic substances, and the Carcinogens and Mutagens Directive, which applies only to substances meeting the criteria for classification as carcinogenic or mutagenic Cat. 1A or 1B according to the Classification, Labeling, and Packaging of Substances and Mixtures (CLP) regulation. The joint declaration calls for a single CMR directive, building upon the current Carcinogens and Mutagens Directive and incorporating principles of risk management related to CMRs as set by other EU or national legislation. As a general principle, exposure to CMRs would be avoided, in line with the prevention hierarchy under the current Carcinogens and Mutagens Directive. Where this is not possible, risk management measures must ensure that:

The risk from using the substance is adequately controlled, i.e., the exposure is below a level where health risks cease to exist; or

The level of exposure of workers is reduced to as low a level as is technically possible for those CMRs where a no-risk level cannot be defined.

The joint declaration suggests that as a starting point, existing indicative occupational exposure limits (OEL) for reprotoxicants could be implemented as binding OELs. To facilitate updating and creating binding OELs, a comprehensive set of criteria is needed to identify and prioritize CMRs entering the process. According to the joint declaration, incorporating reprotoxic substances in the current Carcinogens and Mutagens Directive “is on the short term the most efficient solution.”

ISRAEL

Israel Continues Development of GHS Legislation: Israel has submitted two drafts of legislation that would implement the Globally Harmonized System of Classification and Labeling of Chemicals (GHS) in the country to the World Trade Organization (WTO). The two drafts encompass aspects relating to substances and mixtures, and to transportation.

Comments will be accepted until October 28, 2018. A three-year transition period is expected. During that time, compliance with either the existing SI 2302 Part 1 standard (promulgated in 2009) or the revised version of SI 2302 Part 1 will be permitted. At present, there is no official timeline for when the revised SI 2302 Part 1 standard will be issued in final.

Six New NOMs Relating To Chemical Substances And Worker/Workplace Safety To Be Published: The Mexican Secretaría del Trabajo y Previsión Social (Secretariat of Labor and Social Welfare; Secretariat) has announced the pending issuance of six new NOMs. These six NOMs are expected to be issued as final in November, before the new President takes office.

The new standards to be issued are:

NOM-005-STPS-2017, Handling of hazardous chemical substances or their mixtures in the workplace -- Conditions and health and safety procedures;

Several Middle East Countries Implement Requirements For Cosmetics And Personal Care Products: The countries of Bahrain, Oman, Saudi Arabia, and the United Arab Emirates (UAE) have each announced that they plan to incorporate the Gulf Cooperation Council’s draft regulation (Regulation) for cosmetic products -- “Cosmetic Products – Safety Requirements of Cosmetics and Personal Care Products” -- into their respective national laws. This Regulation addresses the general safety requirements and parameters, as well as labeling and packaging requirements, for all cosmetics and personal care products. An illustrative list of such products is provided in Annex 1 of the Regulation.

The Regulation specifies six functions, or purposes, of use for cosmetic and personal care products, namely: to clean, to perfume, to change the appearance, to protect, to keep in good condition, and to correct body odors. The fields of application are to one or more of the following: the epidermis, hair, nails, lips, teeth, the mucous membranes of the oral cavity, and the external genital organs.

The comment period ends November 24, 2018, and the draft laws are identified as BHR/551 (Bahrain), OMN/384 (Oman), SAU/1090 (Saudi Arabia), and ARE/445 (UAE).

ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD)

OECD Publishes Working Paper On Economic Valuation Of Benefits Of Regulating Chemicals: OECD published on October 22, 2018, an OECD Environment Working Paper entitled Assessing the economic valuation of the benefits of regulating chemicals: Lessons learned from life case studies. The Working Paper reviews and compares five case studies on quantification and economic valuation of benefits in cost-benefit analyses of regulating phthalates, mercury, PFOA and its salts, 1-methyl-2-pyrroloidine (NMP), and formaldehyde. The case studies were carried out as part of the Socio-economic Analysis of Chemicals by Allowing a better quantification and monetization of Morbidity and Environmental impacts (SACAME) Project, and the purpose of the Working Paper is to draw out cross-cutting findings from these studies. According to the Working Paper, the case studies show that there are major challenges in estimating the benefits of regulating chemicals. There are very few detailed applications of the full impact-pathway or damage-function approach, “even for mercury, which is the chemical with most available assessments among those covered here.” The Working Paper states that the case studies document that the values used for morbidity impacts are often incomplete, in most cases covering only lost productivity, lost earnings, or cost-of-illness, but mostly disregarding the disutility costs of pain and suffering from the illnesses. Finally, benefits transfer estimates are simplistically applied. The Working Paper highlights a need for: (1) identification of the potentially most important health and environmental impacts in term of aggregate economic benefits; (2) quantification of the consequences of these potentially most important impacts; (3) new economic valuation studies of these impacts, designed for benefit transfer and use in cost-benefit analyses; and (4) updated and improved guidance for benefit transfer and treatment of uncertainty in cost-benefit analyses of chemicals regulation.

SOUTH KOREA

Public Consultation Begins On CMR Substances To Be Registered Under K-REACH By 2021: South Korea notified WTO on October 16, 2018, of a proposed list of existing chemical substances that cause or may cause harm to humans and animals due to their CMR properties that should be registered under the Act for the Registration and Evaluation of Chemicals (K-REACH) by December 31, 2021. Persons who intend to manufacture or import a listed substance in an amount over one ton per year would be required to register the substance by December 31, 2021. The proposed date of adoption is January 1, 2019, and the proposed date of entry into force is also January 1, 2019. While the notice is in Korean, the chemical names are in English and Chemical Abstracts Service (CAS) numbers are provided. Comments to WTO are due November 5, 2018.

Designation Of K-REACH Priority Substances Available For Comment: On October 16, 2018, South Korea notified WTO of a notice that would designate chemical substances that have any of the following hazards as priority substances under K-REACH: (a) chemical substances that cause or may cause any harm to humans or animals due to their CMR properties; (b) chemical substances that cause or may cause endocrine disorders; (c) chemical substances that are highly bio-accumulative in humans or animals, and long-persistent in the environment; (d) chemical substances that may cause harm to human organs such as the lung, liver, and kidney through exposure; or (e) chemical substances that may cause harm equivalent to the abovementioned or may cause more severe damage. According to the WTO notification, the proposed date of adoption is January 1, 2019, and the proposed date of entry into force is also January 1, 2019. While the notice is in Korean, the chemical names are in English and CAS numbers are provided. Comments to WTO are due November 5, 2018.

UK

UK Auditor Publishes Report On Progress In Implementing EU Exit: The UK’s National Audit Office published a September 12, 2018, report entitled Department for Environment, Food & Rural Affairs: Progress in Implementing EU Exit. The report sets out what the Department for Environment, Food and Rural Affairs (Defra) has done so far to prepare for the EU exit, and assesses whether sufficient progress has been made. The report includes key findings regarding the scale of Defra’s task, Defra’s overall progress in delivering its work streams, and managing the portfolio. The conclusion states:

Defra has done well in very difficult circumstances. Despite facing many challenges that are outside its control, it has rapidly expanded its workforce, quickly filling some of its skills gaps and moving ahead with building the IT systems it needs in case no deal is reached with the EU; and

What really matters now is that Defra accelerate its medium-term planning for the Withdrawal Agreement while preparing final contingency plans. It also needs to make sure that the center of government is fully aware of the key elements that Defra is unlikely to deliver for a no-deal scenario and of impacts on key industry sectors, such as the chemical industry, which could be seriously damaged if a negotiated settlement is not reached.

Defra Publishes Notice On Regulating Chemicals If There Is No Brexit Deal: Defra published on September 24, 2018, a notice entitled “Regulating chemicals (REACH) if there’s no Brexit deal.” This notice sets out how businesses producing, registering, importing, or exporting chemicals would be affected if the UK leaves the EU in March 2019 with no deal. According to the notice, in the “unlikely event” of a no deal, the UK would ensure that UK legislation replaces EU legislation via the EU Withdrawal Act; establish a UK regulatory framework; and build domestic capacity to deliver the functions currently performed by ECHA. The legislation “would preserve REACH as far as possible, while making technical changes that would need to be made because the UK has left the EU.” The Health and Safety Executive (HSE) would act as the lead UK regulatory authority, building on its existing capacity and capability. To ensure continuity for business, Defra would:

Carry across existing REACH registrations held by UK-based companies directly into the UK’s replacement for REACH, legally “grandfathering” the registrations into the UK regime;

Set up a transitional “light-touch” notification process for UK companies importing chemicals from the European Economic Area (EEA) before the UK leaves the EU that do not hold a REACH registration; and

Carry into the UK system all existing authorizations to continue using higher-risk chemicals held by UK companies.

To ensure Defra has the information needed to regulate the safe use of chemicals, the notice states that UK firms would need to take the following actions:

Businesses with existing EU REACH registrations being automatically grandfathered into the UK regime or authorizations would have to validate their existing registration with HSE, opening an account on the new UK IT system and providing some basic information on their existing registration within 60 days of the UK leaving the EU;

Companies with grandfathered registrations would have two years from the day the UK leaves the EU to provide HSE with the full data package that supported their original EU registration and is held on the ECHA IT system;

Businesses that imported chemicals from the EEA before the UK leaves the EU (but who did not have an EU REACH registration) would need to notify HSE and provide some basic data on the chemicals within 180 days of the UK leaving the EU, instead of having to undertake a full registration immediately;

Importing businesses would be responsible for identifying appropriate risk management measures and recommending them to their customers; and

If a business wished to place new chemicals on both the EEA and UK markets, in a no-deal scenario, they would have to make two separate registrations, one to ECHA and one to the UK. The information and data package needed would be the same for both.

Trade Union Warns Of “Chemical Chaos” Due To Brexit: On September 25, 2018, Prospect, “the largest union in the UK representing professional engineers,” issued a press release entitled “Prospect warns of chemical chaos thanks to Brexit.” In its press release, Prospect indicates that the UK’s Chemicals Regulation Division (CRD), which is part of HSE, has been preparing for a “no-deal Brexit”:

As part of its Brexit planning, CRD is supporting Defra in developing an IT system for REACH to cover a no-deal Brexit scenario. The system would be used to ensure that companies can continue to register chemicals in the UK. Prospect highlights that the “system is an insurance policy at a considerable cost to the UK taxpayer and government as it might never need to be used.” The system would not be used if the UK were able to become an active participant of ECHA.

Plans for a biocide IT system are yet to be confirmed. Prospect states “[b‌]iocides come under a separate IT system to REACH … It is unclear if the UK will continue to have access to this resource.”

Prospect indicates that CRD is also using considerable resources by prompting the creation of a list of unacceptable chemicals within the pesticide regime, which would need to be agreed at the EU level and then transposed into UK law by the Withdrawal Act. Prospect states “[a] vote on this list is expected to happen within the coming months. However, if this [is] delayed or not passed for any reason and cannot be agreed upon, or in the event of a ‘hard Brexit or no deal’ then only legislation already agreed and in place before the date of withdrawal will apply in the UK.”

In its press release, Prospect further states that, even if the UK was to negotiate a limited participation with the EU:

Access to IT systems would be limited and as a non-EU member there could be a fee for using the system;

The UK could be frozen out of discussions and advice for other European regulators while they are considering new chemicals; and

Despite having access to the systems, CRD would likely not be allowed to veto new chemicals entering the UK, as it can today.

Sue Ferns, Senior Deputy General Secretary at Prospect, stated:

The UK is currently a leading authority in the chemicals sector and runs the risk of losing its voice in a crucial area. Our members’ livelihoods are at risk if the UK does not negotiate as full an agreement as possible that maintains the UK’s voice in the ECHA. There could also be a wider impact on UK companies producing chemical and biocide products as they may not be able to import what they need to produce products. In turn this could lead to products such as cleaning products, pest control and preservation not being as easily available for UK consumers.

Depending on the outcome of the Brexit negotiations, the UK may have to leave the REACH regime and develop its own UK chemical management regulation outside REACH. Due to the highly interconnected nature of chemicals supply chains, Brexit may have important implications in the area of chemicals regulations for companies both in the UK and in the EU27/EEA countries … Leaving REACH means that UK businesses will become [non-EU entities] in [the] future, unless a different arrangement is agreed as [an] outcome of the on-going Brexit negotiations. It is currently envisaged that REACH could stop applying to the UK already from 30 March 2019 in a worst case scenario (no-deal Brexit) or from 1 January 2021 if a transition period is [ultimately] agreed as part [of] the EU Withdrawal agreement.

The first section of the paper, entitled “Maintaining Access to EU Single Market: Considerations for UK-based Businesses,” provides that the impact of Brexit on UK-based companies trading with the EU depends on their specific role under REACH. CIA and Cefic highlight the potential consequences of Brexit, including the possible need for UK-based chemical manufacturers “to interface with EU-based only representatives (OR) for their substances – such as companies’ affiliates or consultants, or to relocate to the EU or to allow EU based importers to register under REACH.” CIA and Cefic provide the following practical considerations, among others, to ensure continued validity of REACH registrations in the EU:

It is important to identify substances/mixtures impacted by Brexit and your company’s role in the supply chain;

UK manufacturers and importers will need to maintain their registrations in the UK to be able to continue to manufacture/import in the UK until REACH stops to apply to the UK;

ECHA is currently advising to set up a contractual agreement to appoint an OR, which contains a suspensive conditional clause stipulating that the appointment takes effect on the date when the UK withdrawal from the EU takes effect; and

In the case of mixtures, UK formulators may need to track raw materials imported from the EU to confirm future “re-import” to EU status (REACH registration exemption).

The second section of the whitepaper focuses on considerations for EU-based companies with UK supply and trade relationships. Under this section, Cefic and CIA provide that following Brexit, EU27/EEA businesses relying on REACH registrations from UK suppliers will become importers under REACH and may therefore be subject to registration requirements, unless covered by EU-based ORs appointed by UK companies. In this regard, Cefic and CIA provide the following suggestions, among others:

Check the list of your actual suppliers and approved suppliers of your substances and mixtures;

Identify substances and mixtures that are sourced from UK suppliers;

Bear in mind that registrations are per legal entity, not per company; and

Remember that in the case of mixtures, an EU27 supplier of a mixture may also be dependent on a UK supplier for a substance or for a mixture in a mixture.

The third section of the whitepaper entitled “Implications of a Future UK REACH for UK and EU27/EEA Companies” states “[t]hrough the EU (Withdrawal) Bill, the UK Government will convert REACH into UK law on UK exit day … The status of registrations obtained before Brexit to cover the UK market is currently unclear and [dependent] on the outcome of the Brexit negotiations.” Cefic and CIA provide that, under a no deal Brexit:

UK-based manufacturers need to notify the UK authority within 60 days from March 29, 2019, and then resubmit registration data in the UK within two years for products already registered under REACH.

UK companies (currently downstream users) that source products from EU suppliers will become UK importers under UK REACH and may be subject to the UK REACH registration scheme. A notification, within 180 days from March 29, 2019, is required as an interim arrangement with full registration expected at a later date.

It is expected that non-UK companies will be able to appoint a UK-based OR under UK REACH.

Placing new chemicals on both the EEA and UK markets in a “no deal” scenario would mean two separate registrations -- one to ECHA and one to the UK, with the same data package.

In conclusion to the whitepaper, Cefic and CIA provide a flow chart to facilitate “no deal preparedness” for supply chains affected by Brexit. The flow chart elaborates several Brexit-related measures for stakeholders, which CIA and Cefic strongly recommend be initiated early for complex value chains. The whitepaper states that although a no-deal Brexit is not the preferred outcome, Cefic and CIA recommend preparing for this case.

HSE Publishes Technical Notices Concerning Chemical Regulation In The UK If There Is No Brexit Agreement: On October 12, 2018, HSE published the following technical notices concerning the regulation of chemicals in the UK in a no-deal scenario:

The technical notices provide information intended to allow businesses and citizens to understand what they would need to do in the “unlikely event” that the UK leaves the EU without an agreement so they can make informed plans and preparations. HSE states that the government “remains committed to securing a negotiated outcome.” Following the publication of the whitepaper for the future relationship on July 12, 2018, “negotiations are continuing at pace to agree the terms of this future relationship alongside the Withdrawal Agreement.” HSE states that it is supporting this activity.

VIETNAM

Updated Draft National Chemical Inventory Available For Comment: On September 15, 2018, Vietnam issued a notice announcing the availability of an updated draft National Chemical Inventory. The draft Inventory currently includes 31,745 substances, a significant increase from the 4,927 substances included on Vietnam’s March 2017 draft Inventory. Comments on the draft National Chemical Inventory were due October 15, 2018.